Distribution of expenses and credit under GST

[Rajat Gupta]

Company X is engaged in selling goods through ECOs (Amazon at present). It has a head office (HO) in Bengaluru and multiple godowns in different states. There is no specific branch office in any other state. All godowns are maintained in the premises of Amazon only.

All the inward invoices like consultancy, legal fees, advertisement, etc. are received by the HO. My query is, can the HO choose not to allocate these charges to other branches, or is it mandatory to allocate/distribute these charges and ITC on them to the other branches?

AI Summary

Input Service Distributor credit must be shared across multiple GST registrations; head office cannot retain common input tax credit.
Common input service credits received at a head office but attributable to multiple GST registrations must be distributed through the Input Service Distributor mechanism, and the head office cannot retain the entire input tax credit on such expenses. For entities operating through distinct registrations, the statutory scheme requires credit to flow to the beneficiary registrations through ISD invoices supported by the original supplier invoice. The monthly distribution prescription in Rule 39 is treated as directory rather than mandatory, so a delay does not extinguish entitlement once credit is properly passed on.